BigBasket.com, online grocery business run by Supermarket Grocery Supplies Pvt. Ltd, raised $150 million in a funding round led by Dubai-based Abraaj Group which saw the participation of new investors such as the International Finance Corporation and Sands Capital.
Existing investors like Bessemer Venture Partners, Helion Advisors, Zodius Capital and Ascent Capital also participated in the round, the Abraaj Group said in a statement on Tuesday.
“The fresh funds will be used to build one of the largest grocery businesses in the country, increase the reach of its just launched one-hour express delivery service and also to launch a marketplace for speciality stores,” said V.S. Sudhakar, co-founder of BigBasket, in the statement.
The company has raised $92.8 million in three earlier rounds, according to start-up tracker company Tracxn.
Bengaluru-headquartered BigBasket currently operates in 18 cities and averages five million monthly unique visitors and executes over one million orders per month, the company said.
The investment comes at a time when hyperlocal grocery delivery companies like Grofers India Pvt. Ltd, which had raised $120 million from Japan’s SoftBank and Tiger Global in November 2015, had to shut operations in nine cities, while its rival PepperTap (Nuvo Logistics Pvt. Ltd) has stalled any expansion plans in the country.
E-commerce major Flipkart Ltd shut down the pilot version of its groceries deliveries app, Nearby, in February 2016, barely five months after the company started testing it. Even Paytm (One97 Communications Ltd) closed its grocery service in June 2015.
The grocery delivery business operates on wafer-thin margins. Established players who have raised significant sums of capital have also struggled to crack the business.
However, the business has also attracted large players. Amazon Seller Services Pvt. Ltd, the Indian unit of the world’s largest online retailer, plans to expand its ‘Kirana Now’ initiative into a full-fledged business, Mint reported on 19 January 2016. “The strength of BigBasket’s business, which amounts to a transformational experience for its target consumers, is evident from the success of this fund-raising. As India moves towards organized retailers that offer standardized quality, comfort and speed in the shopping experience, we look forward to guiding BigBasket in its next phase of development,” said Omar Lodhi, partner and head of Asia for the Abraaj Group, in a statement.
The group manages $9.5 billion assets across 140 investments in sectors, including consumer, energy, financials, healthcare and utilities.
This round of funding marks Abraaj’s third investment into e-commerce, the earlier two being in Turkish online retailer Hepsiburada and Dubai-based mobile application taxi service Careem.
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Source – Livemint